THE TUBACEX GROUP

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THE TUBACEX GROUP
http//www.tubacex.com
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INDEX
1. THE TUBACEX GROUP
1.1 COMPANY HISTORY 1.2 IMPORTANT FIGURES 1.3
MULTINATIONAL GROUP 1.4 OUR CURRENT MANAGEMENT
MODEL 1.5 POINTS OF NOTE 1.6 COMPETITIVENESS PLAN
2. MARKETS AND SECTORS
2.1 WORLDWIDE PRODUCTION AND CONSUMPTION 2.2 OUR
SALES DISTRIBUTION 2.3 OUR MARKET SHARE 2.4
INDUSTRY CHARACTERISTICS
3. ECONOMIC-FINANCIAL AND STOCK EXCHANGE
INFORMATION
3.1 MAIN FIGURES 3.2 HIGHLIGHTS 3.3 STOCK
EXCHANGE INFORMATION
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1. THE TUBACEX GROUP
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1.1. COMPANY HISTORY
1963 The Founding of the Company
1965 Start-up of production. Carbon and Alloy
Steel Seamless Pipes
1970 Stock Exchange flotation
1975 Setting up of Sales Offices Abroad
1988 First Production of Stainless Steel
Seamless Pipes
1992-93 Restructuring of the Group Management,
Strategy, Processes, Products and Markets.
1995 Total Acquisition of Salem Tube (USA)
1999 International Growth Acquisition of SBER
(Austria) and ALTX (USA)
2002 Maximization of Profitability and
Competitiveness. Shut down of ALTX
2003 Implementation of the Competitiveness Plan
in ACERALAVA, TTI and SBER. New Strategic Plan
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1.2. IMPORTANT FIGURES

• MAIN INTERNAL HIGHLIGHTS
• 1995 profitability growth start-up due to the
  restructuring of the group
• 1999 the group reaches its current structure
  after the SBER and ALTX acquisitions.
• 2003 Tubacex Group is focused on maximizing
  competitiveness after the shut down of Altx at
  the end of year 2002.
• EXTERNAL FACTORS
• 1996, 1997 and 1998 high part of the cycle.
• 1999, 2000 and 2001 low part of the cycle.
• 2002 Light trend swap.
• 2003 Difficult market situation. due to the
  international uncertainty.

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1.3. VERTICALLY INTEGRATED MULTINATIONAL GROUP
(1/2)
Raw Materials Nickel Ferrocrome Stainless
Scrap Others
M A R K E T
DISTRIBUTORS
Cotubes, Commercialisation
Aceralava, steel mill
International Network
TTI, SBER Extrusion
Facilities
TTA, Accessories
International Network
TTI, SBER, SALEM Cold finishing Facilit
Cotubes
International Network
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1.3. MULTINATIONAL GROUP WORLDWIDE SPREAD (2/2)

• TUBACEX GROUP COMMERCIAL NETWORK

30 NAFTA Market-Share
35 Europe Market-Share
14 ROW Market-Share
The Company reaches 22 of the market share in
its range of products
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- ACERALAVA- COST REDUCTIONS THROUGH
PROGRESSIVE SYNERGIES

• LONG STEELBARS
• Square Billets 3-18 (80mm-450mm)
• Round Bars 5.5-18 (130mm-450mm)

Products
Sales increase due to TTI and SBER integration,
and increase of the sales to third companies

• SALES IN TONS
• 2000 47.000 Tn
• 2001 57.800 Tn
• 2002 61.100 Tn
• F2003 58.800 Tn

Sales destination
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- TTI- OUR CORE BUSINESS

• SEAMLESS STAINLESS STEEL TUBES PIPES
• HOT 3-8NPS (88.90-219.08mm OD)
• COLD 1/2-4NPS (19.05-114.3mm OD)
• HOLLOW BARS - 32-250 mm OD

Products
Worldwide leadership in production cost
Project market positioning Flexibility and
service
Focus on maximizing profitability and
competitiveness
Sales destination
Final customer
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- SBER- SPECIALIZATION AND ADDED VALUE STRATEGY

• SEAMLESS STAINLESS STEEL TUBES PIPES
• HOT 1.5-8 NPS (60.32-219.08mm OD)
• COLD 1/8-8 NPS (6.0-219.08mm OD)
• HOLLOW BARS 56-250 mm OD

Products
Product Mix complementary to TTI
Between 15 and 25 of sales for Instrumentation
tubes (lt25 mm). Great added value product
Sales destination
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1.4. OUR CURRENT MANAGEMENT MODEL
Structural profitability in every business unit
Highly competitive production processes
Added value and leadership in customers service
Integration and development of synergies between
facilities
Rationalisation and structural cost savings
Solid financial and networth structure
Total Quality Management and environmental policy
VALUE CREATION AND CONSISTENT SHAREHOLDER RETURN
PERMANENT IMPROVEMENT COMPETITIVINESS PLAN
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1.5. POINTS OF NOTE
A solid base of Top Clients

• Leadership position in
• Independent Distributor sales
• Flexibility and service in projects
• Most value added markets Europe and NAFTA
• Highly competitive cost structure

• High quality in all products and processes of the
  Group
• ISO 9000 in every company of the Group.
• ISO 14000 in TTI (hot and cold) and in Aceralava

Corporate Structures for the co-ordination of
production and products commercialisation
Totally modernized and State of the Art
facilities.
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1.6. COMPETITIVENESS PLAN (1/2)
ACERALAVA
TTI
BUSINESS UNITS
SBER
Competitiveness improvement in each business unit
STEPS
Competitiveness improvement in the whole Group
(Best Practices)
Allocation of range/niche products to the
business units (Synergies)
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1.6. PLAN DE COMPETITIVIDAD (2/2)
TARGET
IMPROVE THE COMPETITIVENESS OF THE TUBACEX GROUP
Strategic management of the purchases
Maximise the industrial synergies and the
economies of scale from our industrial
organisation
Improvement of the use of assets
How?
Operations strategy redesign in business units
and in the whole Group
Improvement of the product portfolio
profitability and the commercial efficiency
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2. Markets and Sectors
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2.1. WORLDWIDE PRODUCTION AND CONSUMPTION
WORLD PRODUCTION
WORLD CONSUMPTION
(in of Tons.)
(in of Tons.)


KOREA
CHINA/EAST ASIA
USA
4
JAPAN
JAPAN
OTHERS
8
3
19
8
34
USA/CANADA
EUROPE
EUROPE
23
59
42
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2.2. OUR SALES DISTRIBUTION
GEOGRAPHICAL AREA
SECTOR


FAR EAST
OTHERS
USA/CANADA
9
9
3
8
24
23
EUROPE
60
64
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2.3. OUR MARKET SHARE
E U R O P E
Sandvik Group
41
TUBACEX GROUP
35
DMV
20
Sumitomo
1
Others
3
W O R L D
Sandvik Group
25
TUBACEX GROUP
22
Sumitomo
18
DMV
15
Kobe
5
Others
15
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2.4. INDUSTRY CHARACTERISTICS
Ongoing annual long term growth (2-3) favoured
by customers trend of upgrading to seamless
stainless steel tubes
Strong entrance barriers
Less cyclical than other siderurgical products.
The profitability (EBIT/Sales) goes from 15
(high cycle) to 6 (low cycle)

• Changing external variables due to
• volatile essential raw material prices
  (Nickel/Scrap, chromium and molybdenum)
• instability in foreign exchange and petroleum
  market
• direct impact in case of a reactivation of the
  Project Market

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3. ECONOMIC-FINANCIAL AND STOCK EXCHANGE
INFORMATION
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3.1. MAIN FIGURES
High part of the cycle
Low part of the cycle
2003 is expected to be a difficult year because
of the world-wide economical instability.
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3.2. HIGHLIGHTS
Solid financial structure

• 2000 64
• 2001 53
• 2002 43

• Net debt / Shareholders Equity

• Shareholders Equity / Total Shareholders Equity
  and Liabilities

• 2000 46
• 2001 50
• 2002 51

Financial debt reduction of 13,8 in 2002
Constant and increasing cash flow generation (30
Mill. Euros) in higher parts of the cycle.
BPA growth of 5, 15 in 2002
Structured policy of investments based on a
Pay-Back criterion 2002 11,5 MM Euros, F2003 7
MM Euros and F2004 6 MM Euros

• Constant policy of shareholders return (Pay-out
  between 30 and 40 of the annual net profit)
• 2002 Dividend of 0,042 euros per share.
• 2003 Dividend of 0,042 euros per share.

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3.3. STOCK EXCHANGE INFORMATION (1/2)
Treasury stock amortization
THE GROUPS NET WORTH AND POTENTIAL GROWTH IN
GROUP PROFITABILITY IS NOT YET REFLECTED BY THE
CURRENT STOCK EXCHANGE VALUATION WHICH IS LOWER
THAN THE PREVIOUS SITUATION (BEFORE THE
ACQUISITIONS) DUE TO A PERIOD OF LOW PROFITS
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3.3. STOCK EXCHANGE INFORMATION (2/2)
BUY IS THE MAIN RATING OF THE FINANCIAL
ANALYST S WITH AN AVERAGE PRICE TARGET OVER 1,70
EUROS PER SHARE
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SHAREHOLDER INFORMATION

• QUARTERLY SHAREHOLDERS BULLETIN
• SHAREHOLDERS OFFICE
• Telephone [phone]
• Address TRES CRUCES 8, LLODIO 01400, ALAVA,
  ESPAÑA
• INVESTORS RELATIONS MANAGER
• INTERNET INFORMATION
• http//www.tubacex.com

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THE TUBACEX GROUP
http//www.tubacex.com